Start Time: 2024-11-13 07:00:00

End Time: 2024-11-13 08:30:00

Question: Could you please elaborate on the company's future considerations regarding dividend distributions?

Answer: The company places a high priority on shareholder returns and aims to ensure that our investors benefit from the achievements of Shanghai Rural Commercial Bank. Since its entry into the capital market, the company has consistently provided returns to its investors. For the mid-year 2024, the company will distribute a cash dividend of 2.39 yuan (tax included) for every 10 shares held by common shareholders, resulting in a cash dividend rate of 33.07%. This marks an increase of nearly 3 percentage points compared to the dividend rate for the year 2023. Since its IPO in 2021, the company has cumulatively distributed dividends amounting to 14.659 billion yuan, which is 1.71 times the total funds raised during the IPO, positioning it among the leaders in the listed banking sector. In the future, when formulating our cash dividend policy, we will carefully balance the needs for business development, capital adequacy, and the return expectations of our investors. We are committed and equipped to provide stable and reliable investment returns to the capital market investors.

Question: What are the new strategies and advancements in the fintech sector this year?

Answer: The financial services dedicated to science and technology innovation have consistently represented a distinctive segment of the company 's operations. As of the end of September 2024, the balance of loans extended to technology-driven enterprises amounted to 110.288 billion yuan, reflecting a year-on-year increase of 19.21%. The number of clients reached 4,080, marking a growth of 24.58% compared to the previous year. In the current year, the company has actively advanced the establishment of specialized institutions for technology finance, leading to the preliminary formation of a multi-tiered and widely accessible organizational structure. This has resulted in the development of a specialized institutional framework characterized by a 1+1+12+N model for technology finance. Focused on these specialized institutions, the company has implemented supporting policies in areas such as talent development, differentiated performance evaluation and incentives, centralized professional approvals, and due diligence exemptions. In terms of innovation in technology finance products, the company aligns with the characteristics of technology-driven enterprises, which prioritize knowledge over assets. By utilizing the principles of first-time loans, credit, and medium-to-long-term financing, the company has refined its product line based on the key metrics of core talent + core technology + core advantages. This approach has facilitated the establishment of a comprehensive innovation system for technology finance products throughout their life cycle. Notably, for early-stage enterprises, the company has launched a specialized product called Xinfudai aimed at incubating technology firms. Additionally, it introduced Xinliandai, a follow-up financing product for investment institutions. In partnership with the Lingang Group, the company has rolled out the Lingang Park Technology Innovation Loan, which was upgraded to version 4.0 at the beginning of 2024, specifically targeting key areas of technology innovation. Furthermore, in the Great Zero Bay region, the company has launched the Great Zero Bay Technology Innovation Loan, primarily serving startups and growth-stage technology enterprises within relevant industrial parks.

Question: Will the company's subsequent asset quality remain stable?

Answer: The company prioritizes asset quality and maintains a rigorous approach to identifying non-performing assets, with adequate provisions for impairment. As of the end of September 2024, the group's non-performing loan (NPL) ratio stands at 0.97%, unchanged from the end of the second quarter, consistently remaining below 1%. The provision coverage ratio is at a robust 365%, indicating a strong overall position. From the perspective of leading indicators for non-performing loans, the company has undertaken a thorough assessment and evaluation of newly identified loans under heightened scrutiny. It is anticipated that the annual NPL generation rate will remain stable. Looking ahead, the company will continue to strictly implement asset risk classification requirements and expedite the resolution of non-performing loans, ensuring that asset quality remains stable throughout the year and that the provision coverage ratio stays at a relatively high level.

Question: What is the outlook for the company's strategic operations in the next phase?

Answer: Currently, the domestic economy is in a recovery phase, with both corporate and consumer confidence still rebounding. Although banks are facing increasing operational challenges and risks, the introduction of a series of policy measures has signaled positive support for maintaining net interest margins and fostering high-quality economic development. In this context, the company will maintain strategic focus in the coming year, dynamically optimizing operational strategies in response to both internal and external environments. On the asset side, we will prioritize asset quality, emphasizing a shift in asset allocation towards credit. This will align with national policies and the company's strategic direction, enabling us to continuously increase credit investments in key sectors such as technology innovation, manufacturing, urban renewal, and retail. By leveraging comprehensive client returns, we aim to mitigate the impact on loan yields. On the liability side, we will continue to strengthen our proactive management of deposit maturities while seeking breakthroughs in the accumulation of demand deposits, thereby stabilizing the structure of our time and demand deposits.

Question: What strategies has the company implemented in the realm of pension finance, and what innovative approaches have been introduced this year?

Answer: As a state-owned financial enterprise with over 70 years of foundation in Shanghai, our company is intensifying its focus on the development of a comprehensive pension financial system in 2024. We aim to create an integrated pension financial service solution by establishing a dedicated working group across all levels of the organization. Our strategy encompasses three key business segments characterized by our unique agricultural and commercial banking attributes: pension finance, elderly service finance, and pension industry finance. In the realm of pension finance, we leverage resources from nearly 360 service outlets throughout the city, currently serving over 4 million elderly clients aged 60 and above in Shanghai, while providing pension distribution services to more than 1.2 million clients. In terms of elderly service finance, we are developing a multi-tiered service mechanism tailored for senior customers. This includes the establishment of over 300 age-friendly service outlets, 41 specialized senior service branches within the Shanghai banking sector, and over 250 outlets equipped with integrated governmental service and seamless connectivity with banking services. Additionally, we are expanding our network with the launch of 100 specialized pension financial outlets and more than 940 community-based public service stations branded as Heart Home, effectively establishing a four-tiered service network spanning city, district, street/town, and neighborhood committees. Regarding pension industry finance, we have formed a dedicated research group focused on the elderly care sector, conducting in-depth studies on key industry pathways, highlighting service innovations, and expediting the development of a comprehensive pension industry service map.

Question: What impacts do the series of policy measures introduced in September, including the reduction of existing mortgage loan interest rates and cuts in reserve requirements and interest rates, have on the company?

Answer: The recent reduction in existing mortgage interest rates, while expected to have a short-term impact on banks interest income, will encourage mortgage clients to reassess the necessity of early repayment. This shift is likely to alleviate current pressures related to early repayments, support the real estate market, boost market confidence, and stimulate consumer spending. Such developments are beneficial for the long-term growth and profitability of the company. In terms of interest rate cuts, despite multiple reductions in the Loan Prime Rate (LPR) throughout the year leading to a decrease in the company's asset yield, the company has consistently implemented market-oriented deposit rate policies. It has proactively adjusted its deposit pricing strategy, notably reducing deposit rates twice this year. This approach has effectively lowered interest costs associated with deposits, providing a buffer against the declining asset yields.

Question: Could you please share the company's perspective on the market capitalization management guidelines? Specifically, regarding the mention of undervalued stocks, what plans does the company have in place to develop a market capitalization enhancement strategy?

Answer: On September 24, 2024, the China Securities Regulatory Commission (CSRC) released the Guidelines for the Regulation of Listed Companies No. 10 – Market Value Management (Draft for Comments), aimed at guiding listed companies to focus on their intrinsic investment value and effectively enhance returns for investors. Market valuation is fundamentally a reflection of a company 's inherent value, and market value management ultimately revolves around value management within the enterprise. In response to this guideline, our organization will deeply comprehend its spirit and focus on three key areas to enhance market value management: 1. **Value Creation as Core Focus**: We will prioritize value creation as the central tenet of market value management, led by strategic initiatives. We will firmly uphold our three core strategies, maintain a focus on decentralized operations, and actively develop the Five Major Financial Service Systems. By establishing a sustainable and high-quality development model, we aim to improve management practices and enhance the company 's intrinsic value, which is fundamental to effective market value management. 2. **Strengthening Value Communication**: We will adopt a proactive, positive, and transparent approach to value transmission. This will involve comprehensive information disclosure and frequent market engagement through multiple channels to actively address various market concerns and bolster investor confidence, thereby attracting a broader base of investors. 3. **Balancing Business Development, Capital Adequacy, and Investor Returns**: We will carefully balance the needs for business growth with capital sufficiency and investor return expectations. This will involve the prudent formulation of dividend policies to protect the rights of retail investors and consistently deliver stable and reliable returns, thereby driving the gradual enhancement of both company value and market valuation. Through these measures, we aim to align our operations with the principles outlined in the CSRC guidelines and foster a robust environment for sustainable growth and value recognition in the market.